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J.K. Lasser's Guide to Self-Employment: Taxes, Tips, and Money-Saving Strategies for Schedule C Filers by Barbara Weltman

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CHAPTER 6

Deducting Office-Related Costs

Everyone has to be somewhere, according to a line from an old BBC show. Whether you work in an office building, at a strip mall, at a table in Starbucks, or in your home, you have office-related costs. These costs include expenses related to the physical space, such as rent for an office within a commercial building or a home office deduction if you operate from home. Office costs also include supplies, technology costs for a website and computer backup and maintenance, utilities, and insurance. You may have some or all of these expenses.

Rental Expenses

Whether your office is a retail store, a greenhouse, an artist's studio, a medical office, or an office in a commercial building, it has to work well for you. Check on:

  • Location. Does access to foot traffic matter to you? Do you need adequate parking or access to public transportation?
  • Size. Is the size of the space suitable for your needs?
  • Cost. Rent is usually one of the largest monthly costs for a self-employed person. Can you afford it?

Your monthly rent for commercial space is fully tax deductible. Rent can be a fixed monthly amount or an amount based on a percentage of your gross receipts.

The rent must be reasonable, which is assumed when you and the landlord are not related. However, if the landlord is your brother, ...

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